By NG Seruela
The Palace has confirmed Monday that the national government and water concessionaire Manila Water Co. have amended the 1997 Metropolitan Waterworks and Sewerage System (MWSS) Concession Agreement and come up with a revised concession agreement.
Presidential Spokesperson Harry Roque said in a press briefing that the revised agreement was modeled after the contract of the New Clark City Water and Wastewater Joint Venture Agreement of the Bases Conversion Development Authority.
Roque explained that the revised concession agreement will provide water and good service to Metro Manila that will be advantageous to both the government and consumers. He added that this proves that the Filipinos are in the “mind and heart” of the President.
He pointed out that the amended agreement will protect the interest of the national government, after the ‘government non-interference’ clauses were removed.
Manila Water Co., the provider in the city’s east zone, will also be recognized as a public utility, which makes it “more accountable” to the government and the public. Roque also mentioned the removal of provisions that compromise medium- and long-term liabilities or contingent liabilities.
Roque emphasized that all expenditures of the concessionaire must be reviewed and approved by the MWSS. Moreover, all fully recovered assets must be immediately transferred to the government to ensure that there is no double payment at the end of the contract. He further stated that the “material adverse government actions” will also be limited so that the national government will not be held liable for activities outside its control.
Roque also said that to protect consumers, the corporate income tax will not be charged to them. He added that there is a tariff freeze until Dec. 31, 2022, out of consideration for the country’s current situation.
“Hindi po nila pupuwedeng taasan ang kanilang taripa hanggang 2022. Kinailangan ay iyong kanilang taripa ay adjusted doon sa tinatawag nating inflation. And ngayon po, two-thirds ng consumer price index, hindi katulad ng dati na 100% inflationary impact. So ibig sabihin, kung 3% po ang inflation, 2% lang ang pupuwede nilang maitaas [They cannot increase the tariff until 2022. The tariff must be adjusted to what we call inflation. And currently, [it is] 2/3 of the consumer price index, unlike before [it had] 100% inflationary impact. So it means that if the inflation is 3%, they can only increase it by 2%].”
Also removed and no longer in the revised contract is the provision on Foreign Currency Differential Agreement. Roque said this will result in much lower tariff increases and will protect consumers from possible tariff spikes because of foreign exchange (forex) movements.
“Dati-rati po kasi, ‘yung pagbago ng forex ay sagot ng gobyerno, parang ginagarantiya natin na walang inflation, walang deflation. Ngayon po, wala na pong ganyang probisyon [Before, the changes in the forex rate were borne by the government, it’s like we were guaranteeing no inflation, no deflation. Now there is no such provision],” Roque said.
“So, kampante po kami na dahil po dito sa…revised concession agreement sa Manila Water, ay protektado rin po ang gobyerno at ang ating mga consumers [So, we are confident that the government and consumers are protected under the revised concession agreement with Manila Water],” he added.
Roque said a renegotiation with Maynilad Water Services, Inc., the provider in the city’s west zone, will be conducted next.
Meanwhile, Department of Justice (DOJ) Secretary Menardo Guevarra agreed that the revised agreement will benefit consumers because it is now recognized as a public utility.
He pointed out that another significant feature of the agreement that protects the interest of the consumer is that corporate income tax will no longer be charged to the consumer, whereas it used to be part of the expenditures being passed on by the concessionaire to the consuming public.
